Regulators urged to move faster on Pennsylvania pipeline projects

Oct. 10, 2016
Three Pennsylvania trade associations called on federal and state regulators to move more quickly on their reviews of proposed natural gas pipelines in the commonwealth. 

Three Pennsylvania trade associations called on federal and state regulators to move more quickly on their reviews of proposed natural gas pipelines in the commonwealth. Prolonged delays of decisions could hurt not only producers unable to get their gas and gas liquids to markets, but also local communities that need impact fee revenue to help meet growing demand for basic services, they warned in a Sept. 28 teleconference with reporters.

"Today, the greatest challenge we have in Pennsylvania's natural gas industry is the lack of necessary pipeline infrastructure to connect our gas production with other markets across America," said Stephanie Catarino Wissman, executive director of the Associated Petroleum Industries of Pennsylvania (API-PA), a division of the American Petroleum Institute. "It is estimated that 25-30% of the wells drilled to date still do not have pipeline takeaway capacity."

Many proposed pipelines across Pennsylvania could help relieve this problem, Wissman said. "For example, the Atlantic Sunrise and PennEast projects will deliver much-needed natural gas to millions of American homes by connecting producing regions in northeastern Pennsylvania to markets both here and in other states," she said. "The Mariner East II will transport NGLs such as ethane and butane from eastern Ohio and southwestern Pennsylvania to the Marcus Hook industrial complex outside of Philadelphia."

Gas liquids also can heat homes in the winter, power homes and businesses, and help provide a feedstock for Pennsylvania's agricultural and manufacturing industries, Wissman said. "Recently, UGI received approval to build the Sunbury Pipeline from Lycoming County to the gas-fired power plant at Hummel station in Shamokin Dam. This project has been hailed by local and state elected leaders, regulators, and the business community as the answer to bringing more electricity to local users and also helping to meet clean power goals by using natural gas," she said.

Pennsylvania has more than 60,000 miles of pipelines already, but more capacity is needed, Pennsylvania Independent Oil & Gas Association Pres. Dan Weaver stated. Depressed gas prices have reduced the number of rigs drilling exploratory wells in the state to 22, but there are many completed wells that are increasing demand for more pipeline capacity, he said.

"New pipelines are essential to safely transport this abundant energy to underserved US markets, especially cities in the Northeast Corridor and New England where the demand for more affordable natural gas far exceeds the capacity of the present infrastructure," Weaver said.

"Pennsylvania's manufacturers need new in-state infrastructure to deliver energy and natural-gas feedstocks outside the Marcellus shale formation," said Pennsylvania Manufacturers Association Pres. David Taylor. "There is a new petrochemical manufacturing industry waiting to be born that will create even more wealth than the drilling has, but only if we build new pipelines to connect Pennsylvania natural gas production with the industrial consumers who are waiting for it."

The US Federal Energy Regulatory Commission is reviewing at least 14 proposed Northeast US pipelines, all originating from the Marcellus and Utica shale plays, the officials said. These projects have the potential to supply huge amounts of affordable gas and NGLs to support manufacturing as far away as Canada and the New England states to the north and North Carolina to the south, they said.

"If these projects are encouraged, Pennsylvania will encourage a generation of economic growth," Taylor said. "It all depends on maximizing production and getting the infrastructure to move [the gas and liquids] to waiting customers."

About the Author

Nick Snow

NICK SNOW covered oil and gas in Washington for more than 30 years. He worked in several capacities for The Oil Daily and was founding editor of Petroleum Finance Week before joining OGJ as its Washington correspondent in September 2005 and becoming its full-time Washington editor in October 2007. He retired from OGJ in January 2020.